Tax Alert | VAT. Main communications to be made in November

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Import VAT: Deferral regime for the payment of import VAT quotas

During the month of November it is possible to opt for the application of the import VAT deferral regime, effective from January 1st, 2024. It will be extended for the following years as long as it is not waived or excluded.

Under this regime, VAT taxpayers may opt to defer payment of import VAT until the time they file the VAT returns (Form 303).

If they are entitled to deduct the input VAT for the import made, they may deduct it in the same VAT return in which it is paid, thus avoiding financial costs.

This option can only be exercised by taxpayers filing monthly VAT returns.

That is to say, Large Companies (turnover in the preceding calendar year exceeding €6,010,212.04), those belonging to a VAT Group and those included in the Monthly Refund Register (REDEME).

As for the waiver of this deferral option, it should also be exercised by the taxpayer during the month of November of the previous calendar year in which it is to take effect. Such waiver shall be extended for a minimum period of 3years.

Immediate Supply of Information (SII) on VAT

Throughout the whole fiscal year, it is possible to opt for the electronic keeping of Value Added Tax registers through the electronic office of the Tax Agency, by means of the electronic supply of the invoicing registers (Immediate Supply of Information – SII). This option takes effect the first settlement period that begins after the option has been exercised.

However, the waiver of the option to keep the books through the SII should be made in the month of November prior to the beginning of the calendar year in which it is to take effect. The waiver takes effect as from January 1st, 2024.

The SII implies the obligation to provide data on invoices issued and received within 4 days from their issuance and registration respectively.

The SII eliminates the obligation to file the annual declaration of transactions with third parties (form 347) and the annual VAT declaration (form 390), for the fiscal year in which the SII is applied.

The voluntary option of the SII does not imply the obligation to file monthly VAT returns, but those taxpayers who opt for the SII will maintain their quarterly settlement period.

The option obliges to comply with the SII at least during the calendar year for which the option is exercised. This option is extended for the following years, unless it is waived in the month of November prior to the beginning of the calendar year in which it is to take effect.

Large companies (turnover in the previous calendar year exceeding €6,010,212.04), VAT groups and companies included in the Monthly Refund Register (REDEME) are obliged to apply the SII.

Therefore, taxpayers that in 2023 are expected to exceed €6,010,212.04, or that choose to be part of a VAT Group or the Monthly Return Register (REDEME), will have to adapt their systems to comply with the SII obligation as of January 1st, 2024.

Likewise, companies that expect to invoice less than 6,010,121.04 euros in 2023 and wish to continue to maintain the electronic keeping of VAT Books through the electronic office of the Tax Agency, by means of the electronic supply of invoicing records, should opt for this system in December 2023. The option takes effect as from January 1st, 2024.

Registration for Monthly Input VAT Refund (REDEME)

During the month of November, it is possible to apply for registration in the Monthly Input VAT Refund System (REDEME). In this way, it will be possible to request the refund of the VAT balance in favor of the taxpayer existing at the end of each liquidation period. Therefore, it would be avoided to wait until the last settlement period of each calendar year (fourth quarter) to request the refund of the accumulated VAT for the year.

Likewise, during the month of November, it is possible to request the cancellation of the Monthly Input VAT Refund System (REDEME):

  • If registration or deregistration in the REDEME is requested during November 2023, the option will take effect as from January 1st, 2024.
  • If registration is requested in November 2023, the taxpayer is obliged to remain in the REDEME for at least the year 2024.

However, taxpayers who have not applied for registration in November 2023, as well as businessmen or professionals who have not started the supply of goods or services corresponding to business or professional activities but have acquired goods or services with the intention, confirmed by objective elements, to use them for the development of such activities, may also apply for registration in the registry during the period for filing periodic self-assessments. In both cases, the entry in the registry will take effect from the day following the day on which the period for settlement of such self-assessments ends.

Taxpayers who choose to apply for registration in another period must remain in said registry during the year of application and the following year.

In the case of entities covered by the special regime for groups of entities, registration in the REDEME will only proceed when all the entities of the group applying the special regime have so agreed and meet the established requirements.

Inclusion in the REDEME automatically obliges the filing of monthly VAT returns and the Immediate Supply of Information (SII) for VAT purposes.

Registration in the REDEME may not be requested again in the same calendar year for which the taxpayer has requested deregistration from the REDEME.

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